Environmental CSR and Profitability in Pakistan’s Manufacturing Industry

Abstract

Environmental corporate social responsibility (CSR) has gained prominence in the strategic management of most companies and especially in developing economies like Pakistan due to the increased attention on sustainable business practices. The paper explores the association between environmental CSR activities and the profitability of firms in the manufacturing sector of Pakistan. Based on the stakeholder theory and the resource based schools of thought, the study posits that the impact of environmental friendly practices as waste reduction initiatives, emphasis of energy efficiency, curbing pollution and sustainable management of resources can boost financial performance and ultimately competitiveness. Empirically based on the earlier market studies, the paper identifies cost saving, better brand perception, adherence to regulations and greater trust between the firm and its stakeholders as some of the benefits that firms that use strong environmental CSR strategies enjoy towards achieving profits. The paper highlights the fact that environmental CSR is not just a moral or even a compliance agenda but a strategic investment that converts economic success and ecological sustainability. The implications are given to the managers, policy-makers, and academics; this is because the findings reveal the importance of developing an environmental responsibility of the main business processes as a key to sustainable growth in the manufacturing industry in Pakistan.